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NY Insurance Agents, Brokers Fined After Accepting Kickbacks

Posted on 16 Oct 2009

Agents and brokers at more than two dozen insurance agencies in Western and Central New York were fined as much as $5,000 each after accepting gift cards in return for recommending two specific glass shops to their customers. Another agent had his insurance license revoked.

Disciplinary actions were taken against 44 agents and brokers who accepted a total of $42,650 in kickbacks or failed to supervise staff who accepted kickbacks, according to an announcement from New York Insurance Superintendent James J. Wrynn. State law prohibits insurance agents and brokers from accepting payments to steer their clients to a specific auto repair shop.

The two biggest fines – $5,000 each – were levied against John B. Conaway, an agent with MetLife Auto and Home in Williamsville, N.Y., and Debra Dillenburg, an agent with the David G. Glenn Agency in Dunkirk, N.Y. The two were not only found to have accepted the gift cards, but also to have provided incomplete or false information to the department during its investigation of the matter by denying the receipt of the cards altogether, officials said.

Kurt J. Silvestro and his eponymous agency in Williamsville, N.Y., were fined a combined $4,000 by the New York State Insurance Department for the same actions as Conaway and Dillenburg.

Andrew R. Walker, an agent from Springville, N.Y., had his license revoked July 10 for accepting the payments and steering business, according to department records.

MetLife had the most agents and brokers fined in the investigation, with 10 professionals sanctioned.

The fines came after an investigation by Warren Lester of the department’s consumer services bureau. In a statement, Lester said the inquiry began when Bison Glass, which operates throughout Western New York, contacted the department to say it was stopping the practice of gift card rewards because it could not longer afford it.

A second glass repair company, Pat’s Glass, which operated in Wyoming Co., N.Y., provided the department with additional information on its involvement in providing gift cards to agents, after it went out of business.

Lester pointed out that it is not unlawful for a business to offer incentives to attract business, but it is against state law for agents and brokers to accept payments in return for steering business.

The gift cards given to agents and brokers were from department and grocery stores, typically ranging in value from $35 to $60, according to the department. Some of the payments to individual agents and brokers added up to more than $1,000.